The other day MBW jokingly commented that the global music business had gotten a little “relaxed” this summer – with an apparent lack of companies going out (publicly).
Please, loyal reader, allow us to scratch that thought from the record.
MBW confirmed today (July 24). Cobalt Music Publishing – the house of 700,000 songs – is pulling its entire catalog from Facebook and Instagram in the United States.
Why is cobalt doing this?
According to a memo sent yesterday (July 23) to Cobalt authors and partners, received by MBWCobalt’s existing US licensing agreement with Meta (the parent company of Facebook and Insta) has expired – and the two sides have failed to reach a new agreement.
“Over the course of several months, we have worked diligently and in good faith to come to an agreement covering the new license for the Cobalt Reserve,” reads the memo (which you can view in full below).
“Unfortunately, fundamental differences remained that we were unable to resolve in your best interest, and as a result Cobalt’s stock is in the process of being removed from Meta’s services, including Facebook and Instagram, in the United States.”
Clearly, the note adds: “We’ve always stood by songwriters, and we’re proud to continue to do so. We’re fully committed to a deal with Meta.”
Cobalt’s decision to pull the catalog has implications far beyond the company itself.
Cobalt speculates that it is the publisher of the songwriters after the over 40% Top 100 tracks and albums in any typical week in both the UK and US.
The removal of Cobalt’s publishing catalog will inevitably affect a wide range of hits distributed/signed to the three major record companies, not to mention the various independent distributors/labels around the world.
Interestingly, today’s news comes a few days after another prominent music rights-holder – The Valued at $1.4 billion Epidemic Sound in Sweden – filed a lawsuit against Meta in the US, claiming that the “unauthorized use” of its works on Facebook and Instagram is “extensive”.
The pandemic is demanding more damage $142 million From Meta because of this alleged violation.
Epidemic’s complaint (which you can read in full here ) reads: “Meta has refused to enter into a license with Epidemic, even though Meta has done so with several other rights holders.
“Perhaps Meta is hoping to get away with this for as long as possible. Perhaps Meta is hoping that this will scare a company like Pandemic into bowing to Meta instead of incurring the disruption and expense of a lawsuit. Meta is wrong.”
Following the issues of Epidemic, and now with the confirmation of Cobalt’s copyright removal from Meta, some obvious questions begin to arise:
- What’s behind Cobalt’s refusal to sign a new deal (so far) with Meta? Can do with quality data Its songwriters are receiving, volumes money Are its songwriters getting it – or both?
- Could more big-money lawsuits follow as a result, pitting the broader music business against one of tech’s most powerful giants?
- Will other major music rights holders follow suit in Cobalt’s refusal to sign a new deal with Mark Zuckerberg’s company?
- What will be the consequences if hits created or co-created by Cobalt authors – no longer officially licensed for use on Facebook and Instagram – continue to be published on these platforms?
One thing we know for sure: a a lot Money is at stake here.
According to its latest Music in the air According to the report, Goldman Sachs estimates that Facebook contributed 29% of all ’emerging platform’ ad revenue paid to the record industry in 2021.
that 29%MBW calculates (based on Goldman/IFPI numbers), the latest par $400 million.
Remember: that’s only for one year, and only covers money paid to the record industry (not the music publishing business).
Sources tell MBW that Meta currently continues to pay the music business through upfront advances that are not tied to precise music consumption on its platforms.
Calls appear to be growing for Meta (as well as TikTok) to switch this payment model to a ‘revenue sharing’ system – under which music rights holders will be paid a direct share of copyright advertising revenue generated on their platforms.
Dennis Ladegeleri, CEO of Believe, discussed the matter in an interview earlier this month.
“Yes [we want to see a Content ID equivalent from Meta], and that’s what we expressed to them. But I would also say with Facebook and Instagram we’ve seen better quality of data [than from other social media services].”
Denise Ladegaillerie, believe
We asked him if there was “growing impatience” with Facebook’s failure to launch a direct equivalent to YouTube’s Content ID system for music rights holders.
He replied: “Yes, and that’s what we’ve expressed to them. But I also say with Facebook and Instagram that we’ve seen a good quality of data. [than from other social media services].
“We’re very pleased with that. And the level of monetization [paid out, versus the consumption happening] Aligned to Facebook/Instagram is what it should be when you look at usage.
“Also we are able to see reports on the use of tracks [account to] Artists, as we should.”Global music business